The Uganda Banana Industrial Research and Development Centre (BIRDC) has won a funding from the Adaptation Fund-UNDP Innovation Small Grant Aggregator Platform (ISGAP) under Adaptation Fund Climate Innovation Accelerator to lead a consortium comprising of the Agriculture and Climate Risk Enterprise Ltd. (ACRE) Africa and Agro Consortium Uganda Limited (AIC). The aim is to implement a project on “Innovative Hybrid Index Insurance Solution to Mitigate Climate Risks for Smallholder Banana Farmers in Uganda”.
Smallholder banana farmers in Uganda face significant weather-related losses, with wind and hailstorms contributing to about 60% of these losses. However, existing index insurance products only cover drought and excessive rainfall, leaving such smallholders exposed to other extreme weather events. This project will introduce a Picture-Based Insurance (PBI) product delivered and verified through smartphones, ensuring that banana smallholders can recover quickly and fully whenever extreme climate events occur, preventing financial losses that could threaten their livelihoods and food security.
This innovative product, previously trialled in Kenya by ACRE Africa, will be combined with extension services that provide farmers with education and financing for climate-smart agricultural practices such as agroforestry, water management, access to yield-increasing inputs and dependable markets. Improved agroforestry practices will provide wind breaks and reduce surface run-off, nutrient leaching, and soil erosion caused by heavy rains. This will help protect banana plantations against the worst impacts of windstorms and floods driven by climate change.
The Ugandan consortium will build on existing infrastructure and networks in rural areas to ensure scalability of the insurance product. BIRDC is active across a wider geography and range of agriculture-based climate smart practices, which enables successful bundling strategies to be expanded and replicated with other similar distributors for other crops across the agriculture value chain. The proposed insurance product could serve as a risk mitigation solution for smallholder farmer credit providers, and aims to partner with local financial institutions.
Technical assistance and inputs to the proposal were led by experts in UNEP’s Climate Change Adaptation Unit, delivered as outputs to the IKI-funded NDC Action Project.
According to Bob Natifu, Assistant Commissioner for Climate Change at the Ministry for Water and the Environment, this AFCIA-funded project “is of strategic importance for Uganda, offering a means to kick-start an insurance mechanism for small scale farmers, who are among the most exposed to climate risks. Especially for key crops including coffee, bananas and beans.”
For more information please contact Sumalee Khosla sumalee.khosla@un.org
